Professor Valery Katkalo, Dean of St. Petersburg University’s Graduate School of Management, talks about the school’s 14 years of work to date, its ambitious development plans for the future and the creation of a vast new campus on one of the city’s historic palace and park ensembles.

What are the key goals of the Graduate School of Management?

Our project is part of a national priority project in education with the very ambitious goal of building a Russian business school with a strong international brand in business education. Essentially, the task is to take the school to the upper rankings of business education by 2015. Clearly, this means the creation of a school that is both compatible and competitive with the leading business schools of the world.

What experience have you developed over the last 14 years as a school within the university, and how will it assist you in achieving that goal?

For us, to achieve this goal it’s crucial that we choose the right business model for such a school. If we take the top ten or even top one hundred business schools in the world ,we can see that almost all of them, or at the very least 90 percent, are university business schools. They are mostly in-house business schools at major research universities. This is a model typical for all American business schools. Cambridge and Oxford created their business schools recently, in the 1990s, the London Business School is, formally, part of London University, the Rotterdam School of Business is part of the Erasmus University. So this general trend and this business model is very well known and respected.

Our school was opened in 1993 as a new faculty of St. Petersburg University and we were very committed from the very beginning to this university model for the business school. We started pretty much from scratch, and had four faculty members and 33 bachelor students, but we had three major assets from the very beginning.

Firstly, we are part of the St. Petersburg University, the leading university in the country which, really, not only gives us an umbrella brand but also establishes very high standards for educational and research excellence.

Secondly, we were a very international school right from the beginning. Our co-founding partner was the Haas School of Business at the University of California in Berkeley. Today we have 24 partners among leading European and American schools with whom we exchange students and faculty, and we have numerous joint research projects.

The third important asset is that right from the beginning, we were very keen on corporate relationships. We were probably the first business school in this country to create an international business advisory board, with John Pepper, former CEO of Procter & Gamble worldwide, as chairman.

How many students do you have at present and what programs do you offer?

At present we have about 1,400 students. Most of them are still in our undergraduate division, but we have both Master’s and Executive MBA programs and some retraining degree programs. We plan to develop a school with a large, diversified portfolio of programs and we will of course develop very strong research capabilities here at the school.

How does the school plan to finance all this expansion?

Being inside the university means that we will have diversified sources of funding. At the moment, we’re receiving what we might call seed capital for the business school from the government, but in the near future the government will seriously reduce its funding and we will operate on two major sources of funding – tuition revenues and endowment funds.

What other competitive advantages have you managed to develop in the 14 years that the school has been operating?

We’ve shown that we’ve been very strong in internationalizing the school. This year we will have about 100 European students coming here for a semester on exchange programs which work on the credit transfer system. As I mentioned, we have 24 partners. These are top European and North American schools, so we’re not interested in just getting foreigners – we’re shooting for the schools which can, of course, contribute to our reputation. And we get two benefits here immediately. Firstly, we’re bringing in students from top schools, which has a direct and indirect impact on quality control. And secondly, we’re getting quotas for our students to go there, so it’s really a two-way street.

Does that exchange extend to teachers too?

Not on the same scale, obviously. Having exchanges of professors is a very costly exercise, but with the investment that we’re getting from the government and from business we are now able to invite top international caliber professors to teach here. And from September, 2007, we will have about 6 professors teaching at the school for a semester or on a modular basis and we’re planning on increasing this number exponentially.

How strong is the incentive to run programs in English?

n the future, most of our programs will be run in English. At the risk of stating the obvious, business is now global, and when we talk about the internationalization of programs at the top business schools it’s not just a question of teaching in English, it’s a question of what you understand quality standards in business education today to be. So, I would say that it’s an issue of quality and, of course, an understanding that if we’re in business education then we should be training people for international careers

By international careers, I mean that our graduates may even be working for Russian companies but in the international dimension of their activities or our graduates may work for multinationals operating in Russia. If you look at today’s job market in Russia, you will see that multinationals and the best Russian companies are competing for the same kind of employees. It’s already, more or less, a war for talent between these two clusters of companies.

So English language is a tool but it’s also much more — it’s an indicator of the level of quality of your program. English language programs allow you to attract international faculty. And, in turn, you really upgrade the professional capabilities of the Russian-native professors. All this means that in the future I think that we will probably only preserve two programs in the Russian language – one of the formats of the executive MBA, mostly focused on the regions, and the bachelor program, which, according to the current Russian legislation, must be predominantly in the native language. Nevertheless, we are also introducing a number of English-language courses into the bachelor program.

In what other ways will the programs offered be developed in the future?

The School of Management has effectively been renamed the Graduate School of Management because very important conceptual changes are underway here. First of all we are expanding our graduate programs.

We’ve fixed the intake into our bachelor program at about 200 per year. The areas of growth will be Masters programs, Executive MBA programs and we’re taking three programs with us from the past – the Bachelor, the Master’s of International Business and Executive MBA in the Russian language. All these three programs are very successful in the marketplace.

In parallel to this, however, we’re now designing and preparing three new flagship programs. They are, firstly, a full-time MBA which will take about 16 months, will be entirely in English and will be an internationally positioned program. Secondly, an international executive MBA which will be on a modular basis in partnership with some leading western school or schools. And thirdly, a much longer term project – a PhD program in management. At the moment we have a small doctoral program, but we really need to have an internationally recognized program.

How do research projects arise? Ideas are suggested by the students or the faculty or companies approach you?

We’re working in a field that is developing very dynamically globally. There are certain areas in finance theory, in strategic management research and in marketing and organizational behavior which have been very actively developing in the world over the last twenty to thirty years.

So, we test internationally generated theories in the Russian field to see, for example, how corporate life cycles theory is applicable to the stories of Russian companies or in building from small entrepreneurial firms to successful mid-sized companies. These are fascinating projects, of course.

In all this research, there’s another advantage of being part of the St. Petersburg University – we are able to capitalize on all the resources of the other faculties of the university. In our entrepreneurship studies, for example, we are using a lot of field questionnaires and people from the Sociology Faculty. In finance theories and research, say, the math involved is very important and we are able to bring some very strong people from the Math Faculty, people who are experts in applied math.

What are the plans for the new campus?

In July of 2006 the presidential administration granted the university a very unique piece of real estate for the Graduate School of Management project. It’s 104 hectares on a historic palace and park ensemble, which formerly belonged to the son of Nicholas I, Mikhail Nikolayevich – that’s why it’s called the Mikhailovka. We have to renovate and upgrade the existing buildings. There’s the palace, the kitchen house, stables and a greenhouse. The stables, for instance, will be turned into the main building of the school with the classrooms and the professors’ offices. But then we have to build new facilities. Dormitories, for example. Our third job will be to restore the historic park, which brings additional uniqueness to this future campus.

How much will the faculty have to expand to provide for the new campus and where will the teachers be found?

The school is designed to be quite sizeable by Russian standards. We’re talking about 1,800 students, not including executive education. Of that number, only 800 will be on bachelor’s programs, with the rest in graduate programs. For that size of school we will need about 100 to 120 faculty members full-time. At the moment we have 70.

The advisory board is also a very important part of the project. In early June we had our second meeting of the International Advisory Board which is chaired by First Deputy Prime Minister Sergei Ivanov, and we have a very representative group of top Russian companies taking part. On the Russian side we have Vladimir Potanin, Oleg Deripaska, Vladimir Yakunin, Vladimir Yevtushenkov, Vladimir Kostin, and on the international side we have top executives from Procter & Gamble, Citibank and L’Oreal, just to mention a few. And, of course, Minister Gref and Minister Fursenko are members, along with Governor Matviyenko and the Rector of the university, Ludmila Verbitskaya. We also have several deans from the top international business schools. So we really have very important constituencies of our project on this Board.

How will you know if you’ve achieved your goals? What will be the benchmarks for your success?

By September 1, 2010, we have to open the new campus and have all the programs launched.

Then we will need another three or four years to get what’s called triple-crown accreditation – that’s three major institutional accreditations (EQUIS, AACSB, AMBA).

If we can get them all, becoming the first school in Russia to do so, that will be very important evidence of the fact that we are comparable with the top schools in the world.